Saudi makes big cut in exports to Asia -consultant

LONDON, June 14 (Reuters) Oil power Saudi Arabia has cut exports to Asia by over half a million barrels a day since March to match lower demand from refiners during their springtime overhauls, tanker tracker Petrologistics said on Wednesday.

Production from the world's biggest exporter sank to 9.05 million bpd in May, its lowest level this year, putting it on course to pump just over 9 million in the second quarter -- some 400,000 bpd below average rates for the previous three months.

It is unclear whether demand from Asian refiners will rebound significantly during July and August because of meagre summer gasoline demand in Japan, the world's third biggest oil consumer.

The kingdom has long-term contracts to export just under 7 million bpd of crude worldwide, industry sources said, with Asia accounting for nearly half that volume. The total fluctuates according to seasonal demand and OPEC output policy.

That has been the case during the second quarter with Saudi Arabia shipping 220,000 bpd less crude to Asia in May than April, said Conrad Gerber, the head of Petrologistics. Exports in April were already 350,000 bpd less than March, he said.

''Most of it is the flow through to the east,'' Gerber said.

''It is probably refinery maintenance. You'd have to have a longer-term trend to say (end-user) demand had dropped.'' Buyers in the west took 180,000 bpd more Saudi crude in May than April, compensating in part for the fall in the flow to Asia. The flow to western buyers in April was 150,000 bpd less than March, Petrologistics said.

The export cutback is not unique to Saudi Arabia, the leading producer in the Organization of the Petroleum Exporting Countries.

Iran, OPEC's second biggest producer, curbed exports in the second quarter by about 175,000 bpd due to refinery maintenance, industry sources said.

Producers hope demand from Asian refiners revives during the last six months of the year, after 1.1 million bpd of capacity was offline from April to June. Japan, the region's biggest crude importer, accounted for almost half that volume.

Japan's commercial crude inventories -- which hit a three-decade low at the start of the year -- rose by about 9.5 million barrels between April 1 and June 10, according to data from the Petroleum Association of Japan.

They now stand 7.2 percent below their level at this time a year ago, but in line with the five-year end-June average.

REUTERS DKS RK1806